npower research has revealed that medium-sized businesses in the UK are missing out on significant energy savings each year by not having trained staff in placed to procure energy.
Only 4% of medium-sized businesses in the UK have a dedicated energy specialist, despite the average business spending over £180,000 on energy per annum. Of those businesses with an energy specialist, nine in ten (88%) say the introduction of the role has saved their organisation money.
The npower ‘Energy Matters’ report surveyed over 200 people responsible for energy procurement – including finance, procurement and office managers – in medium-sized businesses to assess how energy buying is managed and whether it is valued within the business. The report examined what impact having a dedicated energy specialist has on a business.
npower’s research found that just one fifth (21%) of businesses have a formalised energy strategy and over three quarters (81%) of those responsible for procuring energy say they spend more time on administrative duties than procurement.
Wayne Mitchell, industrial and commercial markets director, npower, commented: “We undertook this research into medium-sized businesses to further understand their needs when it comes to energy, following recent CBI and government campaigns to offer greater support to this sector.
“The research found that the person responsible for buying energy can have a significant impact on a business’ revenue yet the importance of this role is undervalued across the UK. Businesses are missing a trick when it comes to having a positive impact on the bottom line by not positioning energy as a board level concern and having a strategy in place to manage its procurement. This is despite findings from our previous research which showed that medium-sized businesses rank energy as the second highest business risk they face, above cash flow, legislation and security.”
The ‘Energy Matters’ research also showed that more than half (57%) felt that energy purchasing is not a valued role within their organisation and fewer than one in 10 (7%) has received any kind of formal energy procurement training. As a result, over a quarter (27%) of respondents have remained on the same contract because they haven’t had time to review it and one in five (19%) said they don’t have the expertise to switch contracts.
In those businesses that do have a dedicated energy specialist the picture was very different. As well as saving their businesses’ money, it was in this role that the most amount of time spent was spent on energy purchasing, the presence of a formalised energy strategy was highest and the value placed on the role by the business was felt to be above average.
Wayne Mitchell continued: “With office managers and not energy specialists accounting for the majority of those responsible for energy procurement in medium-sized businesses it is easy to understand why the role can be undervalued, as these people will be juggling a wide variety of tasks to keep the business afloat. Through better managing energy procurement, costs can be kept to a minimum by ensuring energy is purchased at the correct times, namely avoiding peaks in the market, and with a little knowledge businesses can take control of this themselves. Anyone wanting to find out how should source this advice from their supplier and act now to start saving.”